ConAgra has told investors that it is looking to add to the company’s portfolio both organically and internationally, and that it remains interested in purchasing Ralcorp.
Speaking to investors and analysts on an earnings call today (23 June), ConAgra’s CEO, Gary Rodkin, said he is confident that the “strong operating platform” the company has built up puts ConAgra in “a good position over the long-term for organic growth, as well as confidence in our ability to add assets to our base through smart acquisitions”.
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Rodkin said the company expects, over time, to return to “high-quality share volume and net sales performance” in its core existing businesses and to leverage its resources to “expand into high-growth” adjacent categories.
“With our ongoing work to create stronger operations and accelerate growth in our core business, we are also focused on gaining more presence in private-label and expanding internationally,” Rodkin told analysts.
“These actions will help us deliver on our growth objectives over the next few years. These strategies are fundamental to our future. The competencies we have developed over the last few years gives us confidence to add to the portfolio in meaningful ways in attractive categories.”
ConAgra Foods recently snapped up the Marie Callender’s trademarks in a deal worth US$57.5m, and has for some time, pursued Ralcorp Holdings. The US food maker last month turned down ConAgra’s $4.9bn takeover bid for the business.
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By GlobalData“As we have said before we continue to believe this company [Ralcorp] would be a good strategic and financial fit for ConAgra Foods,” Rodkin said. “We believe private-label has a strong future, one where we can leverage our core capabilities to generate good growth. Based on the response we have received from both our shareholders and Ralcorp’s shareholders, we believe that investors recognise the sound and strategic logic of the combination of our two companies.”
He added that, should ConAgra be unsuccessful in securing Ralcorp, that “all fundamentals are still very much in play”.
“The innovation pipeline is stronger than it has ever been before, the supply chain, our productivity ramp is just as robust as it’s ever been, so we feel very very good about the fundamentals of the business,” Rodkin insisted. “This has been a tough external environment that we will get through.
“We remain interested in Ralcorp but our core issue is really about the rapid input cost inflation,” he added. “We are going to get through it and as this year progresses, as our net pricing actions take hold, we will work our way through that. But our foundation is so much stronger, we believe we can confidently add to the portfolio whether it’s this opportunity or another, our success over time is going to be based on building growth and smartly pursuing strategic adjacencies that would be branded adjacencies. We are serious about adding to the portfolio.”
ConAgra this morning booked an increase in full-year profits, despite what it describes as challenging economic conditions. The firm’s share price rose 0.35% to $25.20 at 16:03 BST today.
